Climate change increasingly crucial for future of world economics
As the average temperature and water levels increase around the globe, more and more countries are taking steps to combat the effects of climate change.
The 2015 Paris Agreement brought over 190 countries together to discuss an agreement that aimed at mitigating the effects of climate change on a global scale. On a more national level, countries like China continue to pass regulations to limit carbon dioxide emissions. These regulations are generally aimed at factories and the gas and oil industries, which contribute to high emission levels.
However, the climate change debate rarely focuses on the economic effects of the issue. Studies released in the past few years show that poorer regions, along with regions that are negatively affected by oil and gas regulations, tend to be impacted heavily by climate change.
According to NASA, climate change is largely caused by human actions that result in a rise of the presence of harmful gases in the atmosphere.
These gases, which include carbon dioxide, trap heat from the sun on earth and prevent it from rising through the earth’s atmosphere. Now this heat cannot escape, leading to the earth’s temperature rising by 2 degrees Fahrenheit since the late 19th century.
The rising heat levels lead to melting ice caps, which in turn raise sea levels and put areas at or below sea level at risk. Now governments in major coastal cities have invested in the infrastructure to prepare those areas for the effects of rising sea levels.
A 2017 study called “Estimating economic damage from climate change in the United States,” predicts that climate change will have negative effects on gross domestic product in the southern United States, while having a positive effect on GDP in New England and parts of the Pacific Northwest. In other words, regions that are already poorer than average will suffer even higher losses, thus increasing the magnitude of current inequality.
“By the late 21st century, the poorest third of counties are projected to experience damages between 2 and 20% of county income (90% chance) under business-as-usual emissions,” the study states. The poorest third, according to the map, is largely located in the Southern and Southwestern states.
When it comes to specific industries, climate change is likely to have a major effect on agriculture. The study shows in the last two decades of the 21st century, the Midwest and southernmost counties will experience a drop of up to 90 percent in yields of maize, wheat, soybeans and cotton.
With this, there is a rising demand for electricity during the summer, especially in the Southern states. Meanwhile, employees will work less because of the risk associated with working in dangerously high temperatures, the study also states.
Furthermore, these rising temperatures will affect future mortality rates around the country. In the South, where temperatures are on the warmer side, researchers predict that the mortality rate will increase along with temperatures. In the North, where temperatures tend to be lower, the mortality rate will likely decrease.
The study went on to say that economic damage resulting from climate change will be highest in the Southern states, reaching up to 28 percent of a county’s GDP.
Lastly, it is important to mention the effect of climate regulation on the economy.
In mid-April, Jacinda Ardern, prime minister of New Zealand’s, announced that the country will ban new permits for offshore oil exploration, a move that is meant to mitigate the effects of climate change.
When announcing the decision, Ardern said that the ban would “protect future generations from climate change,” but the BBC also reported that the existing 22 permits will not be affected by the ban.
Some have touted the move for putting the environment ahead of the gas and oil industry. However, experts warn that the move will have a negative effect on New Zealand’s economy. About $1.84 billion of New Zealand’s $186.4 billion economy comes from gas and oil each year, or almost 1 percent of the nation’s economy, the BBC reported.
Another important example is China. As a major contributor to carbon dioxide emissions, China has often been called on by the global community to place more regulations on its manufacturing.
After gaining notoriety for its terrible air quality, China experienced a drastic change in its attitude regarding climate issues. In 2016, for example, the Chinese government cracked down on illegal manufacturers who operated with disregard to any laws in the cities where they operated and contributed to the increasing carbon dioxide emissions.
Then, in 2017, Forbes reported that over 80,000 Chinese factories received fines and were charged with criminal offenses because of their opinions. To reduce smog levels, The Financial Times also reported that the most notorious manufacturers were threatened with closure.